Millions of Americans are poised to receive some of the largest federal tax refunds in recent history during the 2026 filing season, with average amounts potentially rising by $1,000 or more compared to prior years, thanks to retroactive tax cuts enacted under the One Big Beautiful Bill Act signed by President Donald Trump.

The Internal Revenue Service officially opened the 2026 tax filing season on Jan. 26, allowing taxpayers to begin submitting their 2025 federal income tax returns. The agency expects to process around 164 million individual returns by the April 15 deadline, with most filers opting for electronic submission.

Experts and administration officials project this year’s refunds could mark the largest cycle ever, driven by provisions in the landmark legislation that extended and expanded elements of the 2017 Tax Cuts and Jobs Act, introduced new deductions for overtime pay, tips, certain car loan interest and an additional standard deduction boost for seniors, among other changes. The White House has highlighted the bill’s impact, noting that many workers saw continued higher withholding during 2025 despite the retroactive reductions, leading to larger overpayments that will now return as refunds.

The average refund issued in the 2025 filing season was approximately $3,167, according to IRS data, up slightly from $2,939 in the prior cycle. Analysts from firms like Piper Sandler, Morgan Stanley and the nonpartisan Tax Foundation estimate the 2026 average could climb to between $4,000 and $4,167 or higher for many filers, with some projections suggesting increases of 15% to 30% depending on individual circumstances. The Tax Foundation has calculated that the bill could deliver up to $129 billion in total individual tax relief for 2025, with a significant portion — potentially $60 billion to $100 billion — manifesting as higher refunds rather than reduced withholding throughout the year.

Middle-income households earning between $50,000 and $150,000, families claiming dependents, workers with tip or overtime income, and seniors qualifying for enhanced deductions stand to see the most noticeable boosts. The changes include expanded Child Tax Credit benefits, Adoption Credit adjustments and education-related provisions that could further increase refunds for qualifying families.

To receive refunds as quickly as possible, the IRS strongly recommends electronic filing with direct deposit. Most refunds for e-filed returns with direct deposit are issued within 21 days of acceptance, often faster — sometimes in as little as 10 business days for early filers. Paper returns typically take six weeks or longer, and the IRS has phased out paper refund checks under an executive order modernizing federal payments, meaning those without direct deposit information on file may face temporary holds until they provide banking details or request alternatives.

For early filers who submitted returns shortly after Jan. 26, refunds could have begun arriving as early as Feb. 6. Those accepted in early February might see funds by mid- to late February. The IRS provides estimated timelines based on acceptance dates: returns accepted by Feb. 2 could arrive by Feb. 13, while those from mid-February might land by late February or early March.

Special rules apply to certain credits under the Protecting Americans from Tax Hikes (PATH) Act. Refunds claiming the Earned Income Tax Credit (EITC) or Additional Child Tax Credit (ACTC) face a mandatory review period to prevent fraud. The IRS lifts this hold after Feb. 15 (or the next business day), with most qualifying refunds expected to be available by March 2 for direct deposit filers with no other issues. The “Where’s My Refund?” tool on IRS.gov will show projected deposit dates for most early EITC/ACTC claimants by Feb. 21.

Taxpayers can track their refund status using the “Where’s My Refund?” tool, which updates within 24 hours of e-filing or about four weeks after mailing a paper return. It provides real-time information on processing stages, any holds and expected issuance dates. The agency advises checking with your financial institution if a refund appears processed but funds are not yet visible, as some banks may take additional time to post deposits.

Several factors can delay refunds beyond the standard timeline. Returns requiring manual review — such as those with identity verification issues, math errors, claimed credits needing substantiation or potential fraud flags — may take longer. Amended returns or those involving large refunds over certain thresholds could trigger additional scrutiny from the Joint Committee on Taxation.

New direct deposit rules introduced in 2026 aim to streamline processing but could cause temporary freezes for returns filed without valid bank information. The IRS will hold such refunds until taxpayers update their details via the agency’s online portal or request a paper check, which may take six weeks or more after a 30-day response window. To avoid this, experts urge filers to double-check routing and account numbers before submission.

The filing deadline remains April 15, 2026, for most taxpayers, though extensions to Oct. 15 are available for those needing more time — though any taxes owed must still be paid by April to avoid penalties. The IRS Free File program and other online tools remain accessible for eligible filers, with resources on IRS.gov detailing changes under the One Big Beautiful Bill.

Administration officials, including Treasury Secretary Scott Bessent, have described the upcoming refund wave as potentially historic, injecting significant funds into the economy during the spring. Economists note that while larger refunds provide a short-term boost for consumer spending, the retroactive nature means many Americans effectively loaned the government interest-free money through higher withholding in 2025.

As more returns are processed in the coming weeks, the IRS will release weekly filing season statistics showing actual refund amounts and volumes. Early indicators suggest strong participation, with electronic filing rates historically around 94%.

Tax professionals advise reviewing pay stubs, W-2s and other documents early to maximize credits and deductions. Those unsure about eligibility for new provisions can use interactive tools on IRS.gov or consult a tax preparer.

The combination of tax law changes and efficient processing promises a smoother — and more lucrative — experience for many this year, though patience remains key for those claiming complex credits or facing reviews.